More steps to maintain growth of Indian economy: PM

On Board Prime Minister's Special Aircraft, Nov 16: On Sunday, Nov 16 Indian Prime Minister Manmohan Singh describing the G-20 summit as a 'successful affair', said there was a consensus among world leaders to provide developing countries with additional resources to help them tide over the global financial crisis and assured that whatever further steps are needed to maintain the growth momentum of Indian economy would be taken.

Dr Singh told reporters onboard Air India One while returning after attending the G-20 summit in Washington that despite a negative impact on the Indian economy of the global turmoil it would be able to clock a growth rate of 7.5 per cent this fiscal. The situation was being constantly monitored by the government on a day to day basis, he said, adding that the adverse impact would be by way of lower exports, and a lower level of foreign capital inflows, including FDI.

He said several steps have been taken to improve the liquidity situation and as it was a evolving situation whatever further steps are necessary they would be taken.

The Prime Minister said the summit reflected the changing economic power equations in the globe. The developing countries are assuming greater weight, he said.

He said while India has been attending G-8 summit it was heard but its suggestions often not taken on board.

The Prime Minister said this was not the case with the G-20 summit. India's views as also of other developing countries were heard more seriously and likely to be acted upon.

He said there was appreciation at the summit that more resources need to be transferred to developing countries so that their growth and development prospects are not adversely affected by the global financial crisis.

Dr Singh said if the growth and development of developing countries was hurt, then the achievement of the millennium development goals would remain a distant dream. He said all developing countries are united in making the demand that the crisis should not become an occasion to divert the world attention from the development dimension of human conditions.

He said India's point of view was that in a situation where private capital was not available for various reasons due to market failures there was need to mount considerable fiscal stimulus to make good the deficiency in private demand.

The Prime Minister said it was agreed that the World Bank, IMF, and regional developmental banks must work out facilities to increase assistance to the developing countries.

Dr Singh said he and Finance Minister P Chidambaram have anticipated at the time of budget making that there was likely to be a global slowdown this year. He said the government has taken excessive risk on the budget deficit but taken care that slack does not emerge. ''So far as our economy is concerned, I think our fiscal stimulus is already on. The fact that we have given record prices to the producers of wheat and rice, Rs 71,000 thousand crore farm loan waiver, extensive programme on social service and infrastructure expansion will maintain the growth momentum,'' he said.

The Prime Minister said inflation is now becoming less of a problem, especially from the deseasonalised data instead of year on year basis assessment that the situation is turning out to be quite better. This will give the government greater maneuverability to use necessary monetary fiscal policy.